FOREX: FX OPTION EXPIRY - Big size in the EUR
Of note:
EURUSD 12.31bn between 1.0400/1.0500.
EURUSD 1.83bn at 1.0500 (mon), the 1.0600 strike has gone up to 6.59bn, but looking too far now.
AUDUSD ~1bn at 0.6350 (mon).
AUDNZD ~1bn at 1.1050 (mon).
USDCAD 1.34bn at 1.4150 (tue).
AUDUSD ~1bn at 0.6350 (wed).
- EURUSD: 1.0400 (4.77bn), 1.0420 (926mln), 1.0425 (450mln), 1.0460 (680mln), 1.0470 (775mln), 1.0475 (300mln), 1.0500 (4.23bn), 1.0520 (730mln), 1.0525 (1.02bn).
- USDJPY: 152.60 (675mln), 154.00 (858mln).
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RIKSBANK: Four Additional Takeaways from the Riksbank Minutes
In addition to our earlier note, see below for four additional takeaways from the Riksbank November meeting minutes. SEK has strengthened around 0.2% against the USD, EUR and NOK since the minutes were released. This likely reflects commentary that the September rate path end point is probably still intact, while this morning’s uptick in European equities will also be providing support to the krona:
- (1) The 50bp cut in November was largely in response to the weak economic outlook. Thedeen, Jansson and Bunge highlight that weak demand from key export markets (such as Germany) increases the need for a recovery in domestic demand – which has not yet materialized. Additionally, Executive Board members re-iterate that improvements in economic activity are necessary for inflation to remain consistent with the 2% target.
- (2) While uncertainty around the US Presidential Election result – particularly with respect to trade barriers – will be analyzed closely in the coming months/quarters, there is not yet enough information to deviate from the previously signalled policy guidance.
- From Governor Thedeen: “Uncertainty has increased, but the risk-adjusted inflation forecast has not necessarily changed very much. It is therefore reasonable, at present, to focus on the weaker economic outlook and to adjust monetary policy accordingly.”
- (3) Bunge, Jansson and Breman each note the recent uptick in food prices as a risk to monitor, even as the overall inflation outlook appears consistent with the 2% target.
- (4) Executive Board members have differing views on the importance of the SEK’s deprecation. Bunge prefers to take a “longer time horizon” view, while Jansson appears more worried. Meanwhile, Seim notes that “stronger growth and optimism for the future could even strengthen the krona even if the interest rate spread against the United States were to increase”.
US TSY OPTIONS: Some standout early Options
Some standout early size option in the US, latest trade:
- TYG5 106.50p, sold at '19 in 20k.
Earlier this morning saw:
- TYF5 112.50c, bought for '11 in 15k.
- TYG5 108.50/107.50, bought for 20 in 19.2k.
US TSY OPTIONS: Large 10yr put spread
TYG5 108.50/107.50, bought for 20 in 19.2k.
